The National Assembly, the country's legislature, last Sunday approved the amended Petroleum Law, with 473 of 475 lawmakers present voting in favor, equivalent to 94.6%.

The revised law expands the legal framework for unconventional hydrocarbons, including natural hydrogen, coal-bed methane, shale oil and gas, gas hydrates, and bitumen. It also introduces legal provisions for carbon capture and storage (CCS) and offshore energy projects associated with oil and gas operations.

The changes are aimed at improving the economics of oil and gas projects, shortening approval procedures, and encouraging investment in technically complex fields, particularly as many of Vietnam’s mature oil and gas assets face natural production declines.

New incentives for difficult fields and CCS

The law provides a framework for CCS activities and allows contractors to use depleted oil and gas fields or existing petroleum infrastructure to capture, inject, and store carbon dioxide.

CCS activities can also be added to existing petroleum contracts. Contractors will be allowed to own, trade, and sell carbon credits, with proceeds from carbon-credit sales accounted for as a reduction in recoverable costs. Costs associated with CCS can be included among recoverable petroleum operating expenses.

The revised law also allows contractors to develop offshore energy facilities, including wind and solar power, within petroleum contract areas to support field operations. Related costs can be included in the recoverable costs of petroleum contracts.

Special investment incentives will apply to deepwater and remote offshore blocks, fields with complex geological conditions, marginal fields, and projects using enhanced oil recovery technologies.

The law also streamlines investment procedures. Approval of a petroleum contract or amendments to an existing contract can replace separate approval of investment policy, while field development plans can be used instead of conventional pre-feasibility and feasibility studies for construction investment.

For the first time, the legislation also includes specific provisions to encourage the development of domestic technical and high-tech oilfield service supply chains. It provides import-tax exemptions for machinery, equipment and specialized materials used for research and manufacturing that are not yet available domestically.

PVD, PVS seen as key beneficiaries

VDSC Securities said the changes, by shortening procedures and improving project economics, could support field development and increase investment in exploration and production.

Recent exploration results also point to potential additions to Vietnam’s domestic oil and gas reserves.

In the Cuu Long basin, the Hai Su Vang-2X appraisal well produced positive results, raising estimates for resources at the Hai Su Vang discovery above the previous range of 170 million to 430 million barrels of oil equivalent.

In the Nam Con Son basin, the Rong Doi Moi-1X well recorded about 242.5 billion cubic feet of gas in place, equivalent to roughly 6.9 billion cubic meters. The TU-14X well at Block 04-3 could add another estimated 500 million cubic meters of gas resources, based on preliminary assessments.

The revised law's provisions for marginal fields, enhanced recovery, and late-life production could also improve the economics of assets that have previously been considered difficult to commercialize.

The ability to combine discoveries or fields in adjacent blocks for joint appraisal and development could help optimize infrastructure and improve project economics, while transitional provisions between old and new petroleum contracts could reduce disruptions to production.

These measures are particularly relevant as several of Vietnam's existing oil and gas fields enter mature stages and face natural production declines. Additional drilling, well intervention and enhanced recovery are therefore becoming increasingly important to sustain output.

VietCap Securities expects PetroVietnam Drilling and Well Service Corporation (HoSE: PVD) and PetroVietnam Technical Services (HoSE: PVS) to be the listed companies most directly exposed to the potential increase in exploration and field development activity.

For PVD, higher exploration, appraisal and development activity would boost demand for drilling rigs and well services. Enhanced recovery and life-extension projects could also generate additional demand for infill drilling and well workovers. Domestic demand for drilling services has already shown signs of improvement, with PVD securing contracts for 2026 drilling campaigns at Block 15-1, Block 12/11, and the Hai Su Den field.

PVS is likely to benefit at a later stage as projects move into development, generating work in engineering, procurement, construction, and offshore services. In the longer term, the expansion of the legal framework for offshore energy and CCS could provide additional opportunities for PVS, leveraging its existing offshore fabrication and construction capabilities. However, these activities are unlikely to become a significant earnings driver in the near term.

In addition, PVS may gain opportunities in offshore wind as a contractor. A clearer legal framework could help advance offshore wind projects proposed by companies including REE, VinEnergo, and Hoa Phat.

PV Gas (HoSE: GAS) could benefit indirectly if new gas discoveries are commercialized, increasing domestic gas supplies and demand for gathering, transportation, and distribution infrastructure.

The direct impact on downstream companies including PVTrans (HoSE: PVT), Binh Son Refining and Petrochemical (BSR), Petrolimex (PLX), and PVOIL (OIL) is expected to be more limited because their core businesses are concentrated further down the oil and gas value chain.

The regulatory changes come as investment in Vietnam's exploration and production sector is expected to accelerate. Vietcap estimates E&P spending could rise 67% in 2026 from the previous year and increase another 40% in 2027 to about $2.8 billion.

Rystad Energy forecasts total investment in Vietnam's offshore oil and gas projects could reach $11.5 billion between 2026 and 2030, nearly three times the level recorded in the previous five-year period.